Wednesday, February 21, 2024

Predictable boost of dropshipping sales in 2023. What is next?

The size of the dropshipping market shows stable growth from $128 billion in 2020 to $225.99 billion in 2022. Only estimation in 2023 shows that it achieves $243.43 or even $287 billion. In comparison, the overall e-commerce market is going to achieve $6.3 trillion. It already has become one of the most popular business models, and the market will double in size again in 2026. The profitability of dropshipping stores can achieve 50%, but usually, the margin is within 10-30%, which is still very high value for e-commerce entrepreneurs.

Unfortunately, dropshipping business is highly competitive, and about 98% of dropshipping stores have monthly revenue of $50K. If you are interested in cutting this multi-millionaire pie of the dropshipping market, go through the dropshipping basics and check tools that make your everyday routine life easier.

Why has dropshipping become so popular?

Dropshipping business model does not include manufacturing and delivery, a dropshipper focuses only on a dropshipping store and proper communication with customers and suppliers. The product quality and delivery can’t be improved; you can only change the supplier and hope that the next one will perform better. Several years ago, dropshippers spent hours manually researching the supplier’s history and performing marketing analysis.

Nowadays, there is plenty of dropshipping software that helps with every step. They took over all routine tasks such as product niche search, marketing analysis, the proposal of trustable suppliers, creating product pages, making listings, repricing, order fulfillment, and delivery tracking. You can search for specific e-commerce platforms (eBay, Shopify, or AliExpress) or the whole Internet. You need only correctly set filters and categories to create a report for your location. You can evaluate estimated profit, find targeted auditory, and plan advertising campaigns based on detailed reports. Some dropshipping tools can create ads targeted for TikTok or Facebook.

Considering the possibility of reducing the tasks of dropshippers, this business attracts beginners and entrepreneurs that want to try new product niches. As you do not have stocks, you can quickly switch from one product to another if customers do not welcome your first choice. Software tools will propose numerous opportunities to start this business properly; you need to choose your way.

The hottest dropshipping niches in 2023

Based on analytics, in 2022, the most popular dropshipping product niches were fashion, electronics and media, toys, food, and furniture. Fashion is expected to be the most rapidly growing niche by 2030 and can achieve 24.8% of the whole market. Only on Shopify, the clothing achieves 16% of all drop shipped items in 2023. Furniture, home appliances, and décor give the highest gross margin – up to 60%, while the electronics niche is limited to 20%. We suggest starting from these product niches for your successful dropshipping store.

You can easily find the hottest product in the niche using dropshipping software by filtering in these categories. Almost all market research tools propose reports with information about average price, sales, and expected profit per all products, and some propose historical analytics up to 365 days. You can expect business success if you choose products from the first lines of such research tools.

Future of dropshipping

Dropshipping has become one of the most profitable ways of passive income. With all marketing and order fulfillment tools, a dropshipper is responsible only for choosing preliminary strategies and organizing advertising campaigns. The beginner can get from $1000 to $5000 monthly, depending on your desired involvement rate and properly following all reports and recommendations.

We can expect further growth of the dropshipping business model, as it doesn’t require much knowledge and investments at the beginning. After the pandemic years, more people have started to choose remote jobs, and dropshipping is an excellent opportunity to work from your laptop using only the Internet. If you want a significant profit, you need to go through several guides and tutorials, recommendations of e-commerce platforms, use appropriate apps to search suppliers and products and organize product pages and listings.

Many online services can support you in all stages of dropshipping business organization. Please do not underestimate marketing campaigns and brand-building activities that are drivers of your dropshipping store. Professional marketing specialists or software support is highly appreciated for preparation for targeting advertisements. Finally, SEO tools for improving your website are also essential to receive organic traffic.

Conclusion

The latest figures have shown that 27% of online retailers are dropshippers. The richest dropshippers are Alexander Pecka and Andreas Koenig, who started this type of online business in 2020 and, by the end of 2020, already have made $500.000. You can also make your efforts as an e-commerce entrepreneur; this is the perfect time to do so! The number of suppliers willing to work with dropshippers is growing; the more tools for automation appear, the more e-commerce platforms allow them to open their stores for dropshippers. With dropshipping, you can focus on the most exciting parts of the business – strategic planning, design creation, and marketing campaigns. Moreover, everything you can perform from any part of the world; you only need a device for connection to the Internet. The rest will be successfully performed with automation software, including order fulfillment.